CAP en EspaƱol
Small CAP Banner

Fourth and Inches: New Mortgage Relief Guidelines Are Important but Fall Short

January 28, 2010

    PRINT:
  • print icon
  • SHARE:
  • Facebook icon
  • Twitter icon
  • Share on Google+
  • Email icon

Contact: Madeline Meth
Phone: 202.741.6277
Email: mmeth@americanprogress.org

By Andrew Jakabovics

The U.S. Treasury today released important new guidelines to mortgage service companies responsible for modifying home loans held by responsible but financially pressed homeowners under the Obama administration’s Home Affordable Modification Program, or HAMP. The new HAMP guidelines are a solid improvement for homeowners at risk of foreclosure because of a simplified application process, but the new rules unfortunately fall just short of really streamlining the process through which eligible borrowers can receive permanent changes to their loans in order to continue to pay on their mortgages and stay in their homes.

The new guidelines—known as Supplemental Directive 10-01—provide a big step forward in terms of simplifying documentation requirements and mandating a timeframe in which mortgage service companies must respond to borrowers’ requests for mortgage modifications. Yet even as the directive sets out clear obligations for timely responses from servicers—acknowledgement of receipt within 10 days of a borrower’s request for modification and a requirement for a decision on a modification within 30 days—the lack of penalties for servicer noncompliance or a true appeals process is disappointing.

Read the full column

Andrew Jakabovics is associate director of housing and economics at the Center for American Progress. To read more about the Center’s foreclosure prevention and housing finance reform proposals, please go the Housing page on our website.

###

To speak with our experts on this topic, please contact:

Print: Allison Preiss (economy, education, poverty)
202.478.6331 or apreiss@americanprogress.org

Print: Tom Caiazza (foreign policy, health care, energy and environment, LGBT issues, gun-violence prevention)
202.481.7141 or tcaiazza@americanprogress.org

Print: Chelsea Kiene (women's issues, Legal Progress, Half in Ten Education Fund)
202.478.5328 or ckiene@americanprogress.org

Spanish-language and ethnic media: Tanya Arditi
202.741.6258 or tarditi@americanprogress.org

TV: Rachel Rosen
202.483.2675 or rrosen@americanprogress.org

Radio: Chelsea Kiene
202.478.5328 or ckiene@americanprogress.org